nuclear-news

Bye Bye Nuclear Renaissance

The market setbacks and stark projections have put an emphatic end to talk of the U.S. “nuclear renaissance” that was still being touted by industry supporters as recently as 2010.

More than half of the 28 proposed new reactors have since been officially cancelled or halted, and most of the others are stalled.

First US nuclear power closures in 15 years signal wider industry problems by Elizabeth Douglas, theguardian.com, Wednesday 25 September 2013“……….Cooper believes market conditions are so unfavorable that premature closures will not be limited to plants that have to compete for customers. He said closures will also hit nuclear plants that operate in regulated markets, where they are mostly protected from the competitive forces that drove the Kewaunee and Vermont Yankee plants out of business.

Nuclear plants in regulated markets are typically owned by the region’s incumbent utility, so they have an automatic buyer for their output and don’t have to compete against lower-cost power producers. State regulators decide how much the utility can charge its customers for electricity, not based on market prices, but based on how much it costs the utility to provide the power, maintain the plants and facilities and operate the utility—plus a specified profit margin. What’s more, regulated utilities that undertake big-ticket projects, such as replacing a nuclear plant’s steam generators, can pass those costs on to its customers by raising rates.

Increasingly, though, state regulators are questioning the economics of pricey retrofits and upgrades, and some states have begun pressing utilities to pay for cost overruns and expensive mistakes on projects.

“Economic pressures have become so severe that regulators have been forced to take action,” Cooper said in his report. More than 50 reactors run in regulated markets, and now that government officials are keeping a closer eye on costs, about three dozen of them are “on the razor’s edge,” he estimated.

David Lochbaum, director of the nuclear safety project at the Union of Concerned Scientists, added that with so many older plants still operating—20 have been online for more than 40 years—equipment problems and safety issues are becoming inevitable. Increasingly, companies and regulators won’t be able to justify the cost of the necessary fixes.

“The underlying factors are similar everywhere. They’re not making buckets of money every day, and it’s very tight,” Lochbaum said. As a plant operator, “you’re basically one surprise away—one component [problem] away—from not having the economics favor you.”

Bye-Bye Renaissance?

The market setbacks and stark projections have put an emphatic end to talk of the U.S. “nuclear renaissance” that was still being touted by industry supporters as recently as 2010. Just six years ago, the NRC received its first formal application for a new nuclear reactor in decades. It was followed by more than two dozen more, as well as a host of proposals to boost the output of existing reactors, and a steady stream of requests for 20-year extensions on plant operating licenses.

More than half of the 28 proposed new reactors have since been officially cancelled or halted, and most of the others are stalled. Many projects that would have sharply increased power production from existing reactors suffered a similar fate.  Four new reactors are under construction, two at Georgia’s Vogtle plant and two at the Virgil C. Summer plant in South Carolina. Both projects are behind schedule and substantially over budget—and being paid for in large part by taxpayers and electric customers. Construction on a fifth reactor, at Watts Bar in Tennessee, was restarted after an 18-year hiatus and will cost customers of the Tennessee Valley Authority more than $4 billion, up from an earlier estimate of $2.5 billion.

Officials at Entergy Corp., which surprised the market last month bydeciding to close its Vermont Yankee plant in 2014, said the shutdown is necessary because high costs at the single-reactor site cannot be recouped in a wholesale market driven mostly by cheaper power from natural gas plants. Entergy said its Pilgrim plant in Massachusetts and its FitzPatrick facility New York have similar problems, but the company said it hasn’t decided their fate yet and it remains committed to its seven other nuclear plants…..  http://www.theguardian.com/environment/2013/sep/24/us-nuclear-power-closures

September 25, 2013 - Posted by Christina Macpherson | business and costs, USA